NFT or Non-Fungible Token is a virtual asset that is identified by its unique serial-number called the non-fungible token (NFT) or ‘token-specific asset’.
In simpler terms NFTs are digital representations of scarce and unique assets on the blockchain and it can be traded and stored just like any other digital asset.
However, what makes NFTs unique is that these tokens are only allowed to be traded or stored by the owner of the specific token and not by anyone else.
This makes it practically impossible for anyone to duplicate or fake a specific token, which is a huge security assurance for the user. Moreover, the user can also track who owns a specific token and how they were able to get hold of it.
There are many other virtual assets that are similar to NFTs such as Crypto collectibles, Ethreums, Rarefied digital items, Digital tokens and a lot more.
What makes NFTs so special?
NFTs are the future of virtual trading, ownership, and offers the capability to create decentralized digital art and ownership of virtual items.
Let’s discover what is NFT art, how it works and some examples of NFT art.
What is NFT Art?
NFT art is an emerging trend in the world of virtual trading and it is essentially the art of trading or ownership of digital assets where the asset is verified as unique by a certain method called hashing.
Hashing is a method of generating a digital fingerprint for any digital asset that cannot be changed.
Hashing is actually the process of converting the original data into a set of characters or code.
And once the hashing process has been executed, no one can reverse the algorithm to get back to the original data.
This unique digital fingerprint or hash value is what identifies the asset and makes it unique.
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How do NFTs work in General?
NFTs are basically tokens that are used to represent unique assets and they can be almost anything; a virtual good, physical good, service, membership, experience, or even data.
Any asset can be represented as an NFT as long as it can be uniquely identified by a certain method. The main goal of people who create such tokens is to create a digital representation of a physical asset, physical good, membership, or any other tangible asset.
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Examples of NFT Art
- A virtual cat that is digitally signed, has micro-chipping capability, can be registered on a blockchain, and can exist on a virtual marketplace.
- A digital Audience that can be transferred from one person to another and serve as proof of ownership.
- A digital certificate that verifies ownership of a certain asset and proves the authenticity of the asset.
How do NFTs work in Virtual Trading?
When you decide to buy or sell a non-fungible virtual asset, your trading software should query the blockchain to check if the seller has the corresponding token.
If the seller does have the token, the purchase will be valid and the seller will be able to sell the asset to you.
However, if the seller does not have the token, the transaction will be canceled and no payment or fees will be charged to the users.
The benefit of using NFTs in trading is that the asset that you are trying to sell cannot be replicated as no one can duplicate a unique digital signature.
Key takeaways
- NFTs are digital representations of scarce and unique assets on the blockchain. These assets can be registered as tradable virtual assets and shares can be created through Initial Coin Offerings (ICOs).
- NFTs are the future of virtual trading, ownership, and offer the capability to create decentralized digital art and ownership of virtual items.
NFT art is a new concept of virtual trading that is gaining popularity quickly. It is basically the art of trading or owning digital assets where the asset is verified as unique by a certain method called hashing.
NFT art is mainly being used for trading rare and unique digital assets and they are not used to represent any physical asset. It is basically a unique digital signature of an asset that cannot be duplicated.